Brookfield office towers in DTLA lose two-thirds of value

The value of two office towers tied to Brookfield in Downtown Los Angeles has plummeted to the curb.

New appraisals of the skyscrapers linked to the Toronto-based investor have cut their value by two-thirds at 725 South Figueroa Street and 333 South Hope Street, Bisnow reported, citing figures from Morningstar.

The reduced appraisals help reset a Downtown office market that collapsed with a pandemic shift to remote work.

The 41-story, 943,000-square-foot EY Plaza on Figueroa was appraised this month at $150 million, or $159 per square foot — or 66 percent less than its appraised value four years ago of $446 million, or $473 per square foot.

Last year, an affiliate of Brookfield handed the keys of EY Plaza to lenders. The property has a receiver, and court approval of a sale is pending, according to Morningstar.

The 55-story, 1.4 million-square-foot Bank of America Plaza on Hope Street was appraised at $189 million, or $135 per square foot — or 69 percent less than its appraised value 10 years ago of $605 million, or $432 per square foot.

Brookfield still owns Bank of America Plaza and suggested that it planned to hold on to the tower in July when the $400 million loan on the property moved to special servicing.

The new valuations track pretty well with Downtown office sales. In December, Carolwood paid nearly $148 million for the Aon Center at 707 Wilshire Boulevard, The Real Deal reported at the time. The deal works out to $134 a square foot.

Earlier this month, the County of Los Angeles finalized the purchase of The Gas Company Tower at 555 West Fifth Street for $200 million. That deal works out to $148 per square foot.

The office vacancy in Downtown L.A. was 32.8 percent last quarter, with nearly 1.2 million square feet of negative net absorption, according to CBRE. Last year, the vacancy was 28.2 percent, with negative annual net absorption of 1.5 million square feet.

— Dana Bartholomew